Trade-Ideas LLC identified

Sothebys

(

BID

) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Sothebys as such a stock due to the following factors:

  • BID has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $46.4 million.
  • BID has traded 257,773 shares today.
  • BID is trading at 3.27 times the normal volume for the stock at this time of day.
  • BID is trading at a new low 6.03% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

EXCLUSIVE OFFER: Get the inside scoop on opportunities in BID with the Ticky from Trade-Ideas. See the FREE profile for BID NOW at Trade-Ideas

More details on BID:

Sotheby's operates as an auctioneer of authenticated fine art, decorative art, and jewelry in the United States, the United Kingdom, China, France, Switzerland, and internationally. The company operates through two segments, Agency and Finance. The stock currently has a dividend yield of 1.7%. BID has a PE ratio of 14. Currently there is 1 analyst that rates Sothebys a buy, no analysts rate it a sell, and 3 rate it a hold.

The average volume for Sothebys has been 1.4 million shares per day over the past 30 days. Sothebys has a market cap of $1.6 billion and is part of the services sector and specialty retail industry. The stock has a beta of 1.57 and a short float of 14.3% with 4.64 days to cover. Shares are down 5.3% year-to-date as of the close of trading on Thursday.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.

TheStreetRatings.com

Analysis:

TheStreet Quant Ratings

rates Sothebys as a

hold

. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and reasonable valuation levels. However, as a counter to these strengths, we also find weaknesses including poor profit margins, a generally disappointing performance in the stock itself and generally higher debt management risk.

Highlights from the ratings report include:

  • The revenue growth greatly exceeded the industry average of 11.4%. Since the same quarter one year prior, revenues rose by 46.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Diversified Consumer Services industry and the overall market, SOTHEBY'S's return on equity exceeds that of both the industry average and the S&P 500.
  • SOTHEBY'S has improved earnings per share by 35.0% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, SOTHEBY'S reported lower earnings of $1.68 versus $1.86 in the prior year. This year, the market expects an improvement in earnings ($2.02 versus $1.68).
  • Currently the debt-to-equity ratio of 1.53 is quite high overall and when compared to the industry average, suggesting that the current management of debt levels should be re-evaluated. Regardless of the company's weak debt-to-equity ratio, BID has managed to keep a strong quick ratio of 1.90, which demonstrates the ability to cover short-term cash needs.
  • The gross profit margin for SOTHEBY'S is rather low; currently it is at 18.10%. It has decreased from the same quarter the previous year.

EXCLUSIVE OFFER: See inside Jim Cramer's multi-million dollar charitable trust portfolio to see the stocks he thinks could be potential winners. Click here to see his holdings for 14-days FREE.